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G.R. No.

L-28271 July 25, 1975


SMITH, BELL AND CO. (PHIL.), INC., petitioner, vs. COMMISSIONER OF INTERNAL REVENUE,
respondent.

FACTS:
From August 1963 to August 1965 the petitioner imported 119 cases of "Chatteau Gay" wine which it
declared as "still wine" under Section 134(b)of the Tax Code and paid thereon the specific tax of P1.00 per
liter of volume capacity. To determine the correct amount of the specific tax due on the petitioner's
importation, the Commissioner of Internal Revenue (hereinafter referred to as the Commissioner)
ordered it tested and analyzed in the Bureau of Internal Revenue Laboratory Center. The analyst who
conducted the laboratory test reported that Chatteau Gay "is a delicate table wine, with an alcohol
content of 9.5% by volume (volume 745 cc @ 290C), characterized with explosion upon opening and
effervescence due to CO2 (residual)," and concluded that it should be classified as "sparkling wine." The
analyst's conclusion is supported by Herstein and Jacobs who, in their book entitled "Chemistry &
Technology of Wines and Liquors,. On the basis of the analyst's report and recommendation, the
Commissioner, on October 11, 1965, assessed the petitioner a deficiency specific tax on the 119 cases of
imported Chatteau Gay in the sum of P11,713.90 under Section 134(a) of the Tax Code which imposes a
specific tax of P12.00 per liter of volume capacity on sparkling wines.
The petitioner does not dispute the mathematical correctness of the Commissioner's assessment, but
contends that the assessment is unconstitutional because Section 134(a) of the Tax Code under which it
was issued lays down an insufficient and hazy standard by which the policy and purpose of the law may be
ascertained and as well gives the Commissioner blanket authority to decide what is or is not the meaning
of "sparkling wines." The argument is thus advanced that there is here an abdication of legislative power
violative of the established doctrine, delegata potestas non potest delegate, and the due process clause of
the Constitution.

ISSUE: WON there is an unconstitutional surrender of legislative powers on Section 134(A) of the Tax Code
and a failure of due process.
HELD: NO. There can be no uncertainty that the purpose of the abovequoted provision is to impose a
specific tax on wines and imitation wines. The first clause of Section 134 states so in plain language. The
sole object of the sub-enumeration that follows is in turn unmistakably to prescribe the amount of the tax
specifically to be paid for each type of wine and/or imitation wine so classified and described. The section
therefore clearly and indubitably discloses the legislative will, leaving to the officers charged with
implementation and execution thereof no more than the administrative function of determining whether
a particular kind of wine or imitation wine falls in one class or another. In the performance of this
function, the internal revenue officers are demonstrably guided by the sound established practices and
technology of the wine industry, an industry as aged and widely dispersed as one can care to know.